Is it Time to Sell/Buy Group 1 Automotive Inc. (GPI) Stock After Recent Trade?

Group 1 Automotive, Inc. (NYSE: GPI) on October 6, 2020 declared preliminary financial results for the three months ended September 30, 2020. Group 1 anticipates diluted earnings per common share to be between $6.25 and $6.65, and adjusted diluted earnings per common share between $6.40 and $6.80. Adjusted earnings per share imitates the exclusion of the $3.3 million pre-tax expense or approximately $0.15 EPS impact of redeeming all previously issued 5.00% bonds due June 2022. This represents a 206% to 226% increase on a GAAP basis and a 112% to 125% increase on an adjusted basis as compared to third quarter 2019 results of $2.04 and $3.02, respectively.

This earnings increase represents a continuation of the solid profit performance of May and June 2020. Group 1 believes that new and used vehicle gross margins in the U.S. have more than offset reduced vehicle sales volumes stemming from low inventory levels, resulting in year-over-year gross profit growth. U.S. SG&A expense as a percentage of gross profit continues to be well below historical levels and was generally consistent with second quarter 2020 reported non-GAAP results. Group 1 expects a material percentage of these cost reductions to be permanent.

In addition, Group 1 is reporting a new $200 million share repurchase authorization.  Purchases may be made from time to time, based on market conditions, legal requirements and other corporate considerations, in the open market or in privately negotiated transactions. The company expects that any repurchase of shares will be funded from cash from operations.  Repurchased shares will be held in treasury. Furthermore, the company expects to reinstate a quarterly cash dividend following its board meeting in mid-November payable in mid-December.

Group 1 Automotive Inc. (GPI) share price soared 16.29% with the closing price of $118.62 on Tuesday. Group 1 Automotive Inc. stock has an exchanging volume of 1.04 million shares, which is high, contrasted with its 3-months average volume of 238.45K shares. Its market capitalization has now reached to $2.06B and analysts have a consensus target price of $120.00 in the 12-month period.

The Benchmark Company announced it was Reiterated coverage of Group 1 Automotive Inc. in a research note on August 27, 2020. The analysts assigned a Buy rating to the stock with a price target of $140. The Benchmark Company rated the stock as a Buy in a research noted published on June 26, 2020. The Benchmark Company rated the stock as a Buy in a research note published on January 09, 2020.

GPI Past Trading Activity

The market tends to become urbane often, in any event, for prepared investors and traders. In any event, when a merchant got what he/she had expected, the market occasionally chooses to move the other way. This instability leads a few traders questioning and re-thinking their moves. This is the reason becoming acquainted with past price performance, just as both long and short time period, is significant. If we look the past performance, during the last one week, GPI price has rose by 36.47%. In the course of past three months sees the stock go up around 76.33%, while it has gain 162.72% over the past six months and 18.62% since the start of the year.

GPI Earning History

Earnings per share are the amount of profit that a company produces during a specific period, which is usually defined as a quarter (three calendar months) or a year. In recent quarter of (Sep 2020), the firm recorded a revenue of 2.13 billion, which was lesser than the gauge of 2.88B made by certain experts. For that equivalent quarter, Group 1 Automotive Inc. posted $3.77 earnings per share (EPS) which was above the consensus estimate of $0.68 by $3.09, which represents to an expansion by 454.40%.

GPI Price Performance

Let us presently take a gander at a portion of its probable help and opposition resistance. Late research on Group 1 Automotive Inc. has seen its stock exchanging -3.72% underneath its three-month high price. A glance at the opposite side additionally observes stock exchanging +89.76% above its three-month low. A more extensive look sees GPI exchanging 7.73% beneath its 52-week high and 351.80% above from its 52-week low price.

GPI Instability & Beta Factor

The Volatility of a stock means that the stock’s drop or increase in the event that the more extensive market drops or rushes. A beta score higher than 1 implies that a stock is profoundly unpredictable while underneath 1 implies that the Volatility of a stock is low. If we look trading Volatility. Its 7-day Volatility is around 6.93%, while it has a month to month instability of 5.02%. The company has an ATR (Average True Range) of 5.90 and a beta factor of 2.33.

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